I bought a house (+ Taiwan Home Loan Interest Calculator)

Legal Legal - Real Estate & Housing
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I have been meaning to share this with fellow Forumosans. I bought an apartment at the end of December last year. :happyrunningaround:

Interestingly, it was Christmas Eve when I signed the first contract, and it was the eve of CNY (my first CNY as a Taiwanese) when I got the keys to the house. This is the first house I have ever owned, so it’s very special to me. :smiling_face_with_tear:

I will probably write a blog post on this detailing every little step of the process, with photos/evidence to help others, but for now, I’ll keep it brief ( my definition of brief :slight_smile: ).

Every Taiwanese colleague/friend advised me against buying “now.” But I’d made a calculated decision and wanted to go through with it, knowing I was prepared for the consequences. I knew the risks.

I DON’T recommend this, but I did everything in 2 weeks because of a lack of time. At the time, I was paying about 24K in rent for a very well-furnished apartment (in a not-so-nice 25-year-old building) in the heart of Kaohsiung City.

My goal was very simple, find my own place in the exact same community with minimal impact on my life. I’d just move things from one apartment to another in the same community. In a span of two weeks, I visited over 20 apartments in the community before finally closing the deal on one of them. Online I studied over 50 available apartments (all that were available).

There are many reasons for wanting to own a place, but for me, one of the biggest ones was not helping any more landlords pay their mortgages. Let’s say I have spent approx. 20K a month in rent for seven years, that’d be over 1.5 million NT$ easily, which is more than enough to pay a deposit on a decent apartment.

I prioritized living space + amount of monthly payments, which means I had to compromise on a few things.

  • Unfortunately, I didn’t get a place facing the sun, but plenty of parks right outside the door, so we’ll just get our sunlight there.

  • It’s on the fourth floor, which helped lower the price.

Here are some of the things that helped me get a good deal :

  1. Firstly, I made a decision only to rent a place that was more or less similar to our current living place. Nothing too splashy. Just not worse than what we were used to.
  2. If we had a choice between expensively furnished and cheap totally-unfurnished, we’d go for the latter. We’d furnish it slowly at our own pace as we got more money.
  3. We’d not buy if the mortgage was above our monthly rent.
  4. Resale value wasn’t as important. No intentions to sell it for profit anytime soon. We really wanted a place to live and store our stuff. We’d probably use it for the next thirty years. Even if we moved out of Taiwan, we’d keep this place. It’s always nice to have your own apartment (even in an old building) in the center of Kaohsiung City, with access to literally everything.
  5. I downloaded the entire record of every apartment sold in that community in the last 20 years. I compiled a list in Excel with a lot of formulas. By the end of it, any apartment shown on 591, as long as I knew the floor, pings, and few other details, I could look up its entire sales history. e.g., I could tell if someone was selling it just for quick profit or if an apartment had issues and was sold multiple times after short periods. That really messed things up for agents. They would walk me into an apartment and give me an outrageous price, only for me to tell them the owner bought this for xxx amount xx months ago. :sweat_smile: The price would drop quickly after that. One of the places I visited was quoted to me for 10 million; I told them this was bought for 7 million less than 60 days ago. “Did they really spend over 3 million in this place in just six weeks?” The price was 8.5 million by the time I exited that apartment.
  6. Getting appraisals from the bank. Given that I had an entire database of every apartment sold in that place, I could quickly figure out our market price for an apartment based on a number of factors. I double-checked this with the bank and found their appraisal matched my numbers. I found that, on average, every agent quoted 1 to 2 million more than the market/bank appraisal price.
  7. My top choice was an apartment where the initial price quoted was exactly the market price. I went to the bank for an appraisal, and their appraisal was above the quoted price. Then I went back and negotiated like hell until I bought it for 1.2 million below the bank appraisal price.

So, I got a 45-ping apartment (no parking) for 5.8 million, where the bank appraisal was 7 million, and most agents were quoting similar apartments up to 8 million.

Now let me share a bit about getting the loan. That was an interesting experience. In my opinion, this is how banks rank foreigners/ex-foreigners when it comes to loans :

  1. (Naturalized) Taiwanese with a (born) Taiwanese spouse as guarantor
  2. Foreigner with a (born) Taiwanese spouse as guarantor
  3. (Naturalized) Taiwanese with a non-Taiwanese spouse
  4. Foreigner without a Taiwanese spouse as guarantor

I’ll just focus on just some of the banks. Surprisingly, I was turned away by quite a few banks, even as a citizen with seven years of Taiwanese employment + excellent credit card history (I never missed a payment).

  • HSBC said they’d only give me 60% as a foreigner and 70% if I had an APRC. Upon showing my ID card, they said they could give me up to 80%, but I asked for 85%. They said they would check. Later they wouldn’t answer me and eventually told me I couldn’t get a loan because they didn’t give loans for “that area.” Fair enough.

  • First bank, where I get my salary, was left confused. The loan officer had to make so many calls. The managers came down. They whispered to each other. I kept hearing “Waigoren” while they were holding my ID card and HHR. Eventually, my “salary bank” told me they had no money left to loan until April 2023 (it was Dec 2022 then). They said all was used up, and they had a quota and a queue, with many people waiting in line for a loan, so “I should probably not wait because my chances were very low.” I got their message and left. Needless to say, my FirstBank account is always empty now. I move my salary out the instant I get it. I don’t want to loan my money to a bank that says they don’t have money left to lend for a quarter of a year.

  • Standard Chartered told me, “Oops, your loan amount is too low.” Even if we do 85%, it would only be 4.9 million, and our minimum (according to the rules) that we must loan is 5 million. I tried negotiating with them for the extra 100K NTD, but they refused. Just silly.

  • CTBC started with 80% but ultimately agreed to give me 85%, but the issue with them was they would raise the rate every time I visited them, citing XYZ. It started at 1.85, then became 1.89, 1.95, then 1.99, all in a span of 3 weeks. So what I did was, at the last minute, I refused to sign the loan paperwork until they reverted to a better rate. They agreed to a lower rate if I paid a one-time 6000 fee, which I did. On the day of signing the loan, after already stamping half the paperwork, the officer asked me confidently for my wife’s ID to be used as a guarantor. He had no idea my wife was a foreigner. I showed him her ARC. He was confused for a while and had to make a few calls. He’d wrongly assumed I was Taiwanese because I had a Taiwanese wife. Ultimately, he told me I didn’t need a guarantor after all. LOL

FYI :

Getting to the main topic of this post. So, I made this Excel tool to help me figure out loan details, the amount, monthly payments, etc. My math is not great, so use this at your OWN risk. It worked for me, though. It always showed the same calculation as the bank.

Just enter :

  1. Price of the place
  2. % age of down-payment
  3. Interest rate (promised by the bank)
  4. Duration of the loan, e.g., 30 years

And you will get a full breakdown of your monthly fee for the whole 30 years (roughly).

Screen Shot 2023-04-11 at 11.45.55 AM
Screen Shot 2023-04-11 at 11.45.55 AM1808×1116 267 KB

In my case, my monthly mortgage is about 18000 something. I have to spend an extra 2000 a month on car parking, which means total rent is 20,000.

Conclusion :

So, I have achieved something that’s not that easy in Taiwan. I moved from a 45 ping apartment into an exactly similar 45 ping apartment (apart from sunlight) within the same community, and in the process of changing from rent to ownership, I reduced my monthly expense by 4000 a month. It’s not a dream home, but it’s pretty livable. It doesn’t mean I have to die in it. Perhaps someday, I will have enough money to upgrade to a better place or buy a second one. It might not even be in Taiwan, I don’t know yet. At least for now, we have a permanent roof over our heads. For someone who is exclusively a Taiwanese citizen, I do need a permanent place here.

I am 5 million in debt now, but it’s doable. I have already earned and spent more than that in 7 years and had nothing to show for it, until this. So, all in all, pretty happy with my decision so far. :crossed_fingers:t2:

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Congratulations on your new home! :house_with_garden:

The earlier one gets his first own home the better. Now you will pay monthly into your own wealth instead of someone else’s.
Of course people need to account for their financial situation to be able pay for the mortgage every month. In many cases the mortgage can be cheaper than renting, but it will take many years to pay off.

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This is the part I’m interested in. How did you “negotiate like hell”? You got a great deal! The previous owner must have been really strapped for cash.

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Fantastic post. Thanks for sharing this. I too was refused a loan as I did not want to borrow enough. Borrow 10 million for a long period and load would be approved, no guarantor.
Each bank branch is their own little kingdom in their own bubble. Citizens do go though the same arduous process some of our friends had to go to a few banks to get a loan and got them from banks their salary was not paid into.

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Naturalized Taiwanese is not the same as Taiwanese? How can 1 and 3 be different?

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When there are like 20 apartments in the same building for sale its makes negotiating better.
There is another way but you need cash and that is to Paimei, or buy a property foreclosed and court auctioned. My wife bought our current place that way. I just provided the cash lol.

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Sweet man, happy for ya. Thanks for sharing the details for us to learn from.
Also the tool.

Fuck I hate Firstbank aswell full of racists and idiots.

And it’s pathetic how banks treat foreigners and new Taiwanese in general.
You really need ninja level EQ to deal with those ignorants SOBs. Their assumptions, their rudeness, their greed.

Their lack of Professional Customer Service.

I always thank them in the end for making me hate them so much, especially Firstbank, that I invested my money in cryptocurrencies instead.

If I want to buy a house can I hire you as my consultant?

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Fake (including public areas) or real (主建物)?

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Also if you want to pay off the loan early many banks will insist you have to pay the full 30 year amount which is nuts.

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I heard some banks will let you pay partially early, but with additional fees on top since the bank would loose out on some of the profits. Making it essentially pointless.

Like the great idea of banks to let foreigners deposit cash to get a credit card with the same amount in monthly limit as the deposit. :exploding_head:

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Now there goes the resale value. :cry: But of course the OP said he didn’t care about that.

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I specifically asked about making extra payments to the principle each month. They said it wasn’t a problem. It will just lower the interest you pay once it is all said and done.

My issue with getting a loan was each bank has their own rules. Some banks will not give you a quote until you have already got papers to show that you are in contract. Most of them say they need to goto property to provide a quote. The quotes that I got back varied greatly from bank to bank, not only in terms of appraisal amount, but also loan percentage. Some were at 60% while some were at 80%.
I think it’s a messed up process if you can’t secure a loan until after you have already entered into an agreement with buyer. Because if you can’t get a loan to meet your needs, you’re out of your earnest money.

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Go to the property ? Don’t they just look up the address? For cities they have clear guidance, for rural areas they get lazy because they don’t have a proper database and can be more reluctant to give loans.

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I never had to when I had an ARC back in the 90’s. The only other foreigners I knew who had local credit cards at the time were expats whose company guaranteed the card payment. I managed to get an Amex Gold card but it took a lot of effort. Also a car loan. I bought an Audi A4, they had a loan for 18 months at 33k a month with 500k down payment. This back in 1996 when banks were open on Saturdays. Car was 1.1 million with on road costs and insurance. I asked about the loan was told no loan to foreigners use your wife’s name as she has ID card. I’m like. ok, I am going to the bank, I have the total amount in cash. Great they said. My reply yes great so now I will take that cash to the BMW dealer next door and buy a BMW. Sales manager goes white in face… pls wait he says… 30 mins later comes back with loan paper for my name.

Amex here said no deal my reply was I already have one from Australia, Their reply oh as a member sure we will give you one the card membership fee was double that of Australia though. Also they checked my payment history never missed a payment.

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Yes. I was told by multiple banks they have to goto the property. So the process that the bank I ended going with gave me a good “quote” up front. Per Marco’s recommendation in his house buying saga thread, I had my offer updated saying that the offer is dependent on me securing a loan for X amount. Once owners agreed, I took the paper to the bank. Bank then made a trip out there and said ok, I can give you what I quoted you. He sends it to his boss for final approval. 2 weeks later, they call us in to sign all the loan papers.

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Everyone prices their houses high. Within 2 month after the sale of the house, the sale price is made available to public on some website. Everyone prices their house high because they expect people to negotiate. Owners also think the price of the house include all the “remodeling” they done along with all the fees they had to pay and fees they will pay for selling. Unless you don’t plan on remodeling, It will cost you more if you have to tear it out and pay for it to be taken away before you remodel it the way you want.

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@Fuzzy_Barbecue
Some qs.
Those apartments you looked at , they were in your neighborhood not all same building community, right? Were there really 20 for sale in one community ?

It’s my impression Kaohsiung has a large amount of rentals available now so probably also a large selection of properties, is it a buyers or sellers market in your opinion?

5.8 million for a 45 ping apartment looks like good value for sure. Has elevator and security and services?

Your major fit out costs will be air-conditioning, what else?

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What a perfect morning and read before getting active on job. Interesting you started 50 % 50 % (principle :interest) in amortization table. Did you negotiate this?

I start with 95 % of paying interest and only 5% of principal (in EU, so is not relative).

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Welcome to the club!

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I couldn’t see anything about how many bedrooms this apartment has, guessing 2 or 3 if 45 ping?

Also is the loan fixed rate or variable? Is there an offset facility where you can offset savings against the principal? Not sure if these are even things in Taiwan, but wanted to ask.